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Russia needs China to buy its weapons

Gabriel DomínguezNovember 24, 2015

Despite intellectual property concerns, Russia recently agreed to sell 24 Sukhoi Su-35 fighter jets to China - a deal worth $2 billion. But what is driving Moscow to seek deeper trade ties with Beijing? DW examines.

Russland Kampfjet Sukhoi Su-35
Image: picture-alliance/dpa

The deal, announced last week by Russian defense conglomerate Rostec, makes China the first foreign contractor of the multi-role Sukhoi Su-35 (main picture), an upgraded and highly maneuverable fighter jet. While the deal has yet to be confirmed by Beijing, Russian daily newspaper Kommersant quoted Rostec CEO Sergey Chemezov on November 19 as saying: "The protracted talks on Su-35 deliveries to China have ended. We have signed the contract."

The agreement reportedly includes not only the supply of 24 jets to the People's Liberation Army Air Force (PLAAF) for a total of $2 billion ($83 million per unit) but also the delivery of ground support equipment and reserve aircraft engines. The first batch of the planes, with the NATO reporting name Flanker-E, is expected to be delivered next year.

A win-win situation?

Russian sales of advanced weapons to China, including modern combat aircraft, are not new. Indeed, throughout the post-Soviet period, China has been one of Russia's most important customers for arms exports. The Chinese have been purchasing systems, such as the Su-27 fighter jet, and advanced surface-to-air missiles, from Russia for over a decade.

Chinesisches Kriegsgerät SU-35 Kampfflugzeug
The Su-35 is one of Russia's most advanced aircraftImage: Getty Images/AFP/J. Eisele

"The arms relationship serves both countries, as Russia has depended on foreign sales to maintain parts of its defense industrial base, and China, with a steadily growing military budget, has been in search of advanced weapons that Western nations are unwilling to sell it," David Ochmanek, a senior defense analyst at the RAND Corporation, told DW.

What makes the latest deal particularly noteworthy, however, is that the Su-35 is one of Russia's most advanced military aircraft, and had not been previously sold to any foreign buyers. Until recently, Russia was actually quite reluctant to sell China the very most sophisticated of its weapons systems.

Russian concerns

James D. Brown, an expert on international affairs at Temple University's campus in Tokyo, explains that the reason behind this has been Moscow's concern that China would copy the technology and begin to produce its own rival weaponry which would then compete with Russian arms on world markets. "Many in the Russian defense industry had complained that this is what happened when Russia sold China the Su-27 fighter jet," said Brown.

Siemon Wezeman, a senior researcher with the Arms and Military Expenditure Program at the Stockholm International Peace Research Institute (SIPRI), has a similar view. He told DW that while China has imported significant numbers of weapons from Russia in recent years, it has also moved towards developing and producing its own advanced weapons, in part by copying Russian and sometimes Ukrainian technology or components such as engines for combat and other aircraft.

The Chinese had been interested in purchasing the Su-35 for several years, with experts pointing to Beijing's particular interest in the aircraft's engine technology, an area in which China still lags behind.

Infografik Kampfflugzeuge SU-27 und J-11 Englisch
China has moved towards developing its own advanced weapons, in part by copying Russian technology, say experts

In fact, the Chinese have not yet been able to master key military technologies, especially regarding jet engines, as Keith Crane, a senior economist at the US-based RAND corporation, pointed out. "Despite the Chinese government's preference to purchase domestically, the PLAAF has successfully lobbied to purchase Russian aircraft because they have been superior to purely domestic models."

Given the copyright issues, there were strong indications that Russia wasn't initially willing to sell its latest Su-35 technology to China. "The argument was that China was likely to buy a small number of aircraft just to learn about the technology and copy it. Thus, any order placed must have been be profitable enough to offset the possible loss of technology," SIPRI expert Wezeman told DW.

Geopolitical factors

It is nevertheless striking that the Russians ultimately agreed to the deal, despite their intellectual property concerns. So why clinch the deal now? On the one hand, Wezeman points out that the Chinese will probably not get the technology transfers needed for a high-level maintenance center for the aircraft, thus making it more difficult for anyone to copy from the 24 units being sold.

But there are also geopolitical interests at stake. It seems that Moscow has decided to set aside its previous reservations and significantly intensify its relations with China - including in the military sector - as a consequence of its currently tense relations with the West. In fact, analysts such as Moritz Rudolf argue that the Ukraine crisis and the Western embargo against Russia have served as catalysts for the completion of arms sales negotiations.

"In the past, Russia would not have sold its most modern military technology to China. One of the key reasons for the policy shift are financial constraints within Russia," Rudolf, who is a research associate at the Germany-based Mercator Institute for China Studies (MERICS), told DW, adding that the S-400 missile defense systems deal, which was officially announced this April, clearly illustrates this.

Infografik Weltweit größte Waffenimporteure (2010 - 2014) Englisch

Missile technology, especially in advanced air-defense missile systems, is another area where Beijing still shows interest in Russian systems or technologies for use in Chinese-developed systems. The S-400 air-defense missile system is, next to the Su-35, the main Russian weapon that has been on the negotiating table for some time.

Closer ties

As a result of the deteriorating relations between Russia and the West, Moscow has been moving closer towards Asia, particularly Beijing. Since 2014, a number of significant economic deals have been signed with China, especially with regard to energy exports.

Political relations have become ever closer. Most symbolically, Chinese President Xi Jinping traveled to Moscow in May 2015 to participate in Russia's Victory Day parade, an event that was shunned by most Western leaders. In return, Russian President Vladimir Putin was present in Beijing in September 2015 to join Chinese celebrations of the 70th anniversary of victory over Japan.

The Russian leader has even begun to describe China as Russia's "natural ally" and proclaimed that relations are now at their "best in all their many centuries of history," analyst Brown told DW.

Regional concerns

China's neighbors will be concerned about the latest Sino-Russian arms deal given that the Su-35 is widely regarded as one of the best aircraft of its type in the world. "As such, it will add considerably to the current capabilities of the Chinese air force, thereby strengthening Beijing's ability to project power in the East and South China Seas," said analyst Brown.

Above all, he added, there must be concern that East Asia could slowly start to be divided into two rival camps, with the United States and allies on one side, and China and Russia on the other. Initial signs of such a division might be found in the recently agreed Trans-Pacific Partnership, which, although including several countries in the region, excludes both China and Russia.

A difficult relationship

However, wide gaps remain between the two countries. For instance, MERICS analyst Rudolf points out that while Putin and Xi have successfully negotiated milestone projects, putting them into practice has become a key challenge in the bilateral relationship. One important example includes the $400 billion "Power of Siberia" gas pipeline project, which is not progressing as expected, said Rudolf. "In addition, key infrastructure projects such as the Altai-pipeline could fail due to financing difficulties.”

And while the countries have stepped up their security cooperation within the Shanghai Cooperation Organization, they still compete over influence in Central Asia. "Beijing's 'One Belt, One Road' initiative and the Russia-initiated Eurasian Economic Union are not compatible in the long term," Rudolf added.

Similar strains can be found in defense ties, where Russia has been bolstering cooperation with China's rival India, already Asia's largest weapons importer. "Whereas China was the most important client for Russia's military aircraft in the past, currently India is as important. Moscow is much more comfortable working with the Indian than with the Chinese industry for a variety of reasons, including concerns about Chinese attempts to steal Russian intellectual property," said China expert Crane.

The last major order?

Given that the Chinese have mastered most military technologies and have thus become less reliant on Russian defense imports, Ben Moores, senior defense analyst at analytics firm IHS, says he sees no real intensification of Sino-Russian military ties in the near future. "The SU-35 will probably be the last major sale from Russia to China," he told DW. "While there is a lot of talk about military co-operation, there is very little action or real substance. China doesn't need Russia as much as Russia needs China."

Flugabwehrraketen S-400 Triumph in Russland
China still shows interest in advanced air-defense missile systems such as the S-400Image: picture alliance/dpa

The Chinese market is still important to Russia, accounting for a quarter ($2.4 billion) of all Russian sales so far this year. But the problem for Moscow is that Beijing only buys a small amount of a weapons system and then copies it. "The one area they can't do this is engines but they are spending huge amounts to catch up. Bear in mind that China spends about $31 billion on procurement every year, so $2 billion isn't a great deal to China," said Moores.

If anything, he pointed out, Chinese imports as a percentage of all procurement spending have fallen over the longer term. "While Russian exports to China are not expected to fall in the short to medium term, I don't see China making any new large orders over the coming decade. The Su-35 is almost certainly the last one," said Moores.

It remains to be seen what impact a decline in Chinese orders would have on Russia's defense industry. For the time being, the sector has a solid backlog of orders from Russia's defense ministry.